DIFFICULT RIDE

Dear Investors

Though week on week markets have gained, on Friday

  Indices closed in negative territory. It was political

Instability (Anna effect) and rising crude prices made

Traders and investors nervous. Large cap stocks corrected

On profit booking while there were some gains in mid and

Small cap stocks

Levels on Friday

Nifty: Open: 5886/High: 5926/Low: 5822/Close: 5842

Sensex: Open: 19602/ High; 19697/Low: 19388/ Close: 19451

What Next;

Monday onwards market is expected to be volatile or flat. We are

Heading for result season. Nifty is trading in a range 5800/5950.

For last few trading sessions.

It looks that we will be getting break out or break down in days

To come. All depends on crude prices and results during next week.

There will be extreme volatility, as next week there are only three

Trading days we might expect low volume high swing trades.

If Nifty manages to break 5950 and close above that we are headed

For 6000 plus levels. If Nifty is unable to remain above 5800 and

Close below, it will test lower levels of 5770.

To maintain an up trend  Nifty/ sensex must trade above 5880-5903/

19650/19700 levels.Any  negative event or news will create difficulties
for the 'Bulls to Ride' the up trend 

Traders have to keep watch on

Global Markets

$Index

$/ Rs relation

CRUDE PRICES

Mondays IIP (Indian Industrial production No.)

And results

Levels to Watch:

UPWARD: 5880(19650)/5958(19810)

DOWNWARD: 5800(19301)/5760(19194)

Technical view:

As written in one of the article 9April 3^rd), recently, Nifty is trying

To close above 61.8% retracement of the fall from Nov 10

Top of 6275(21109) to Feb.11 low at 5310(17296), which is at

5880(approximate), failure to  close above this is keeping

Markets in a ‘Risky Zone’.

Short term trend looks to be ‘Negative’, though long term up

 Trend is still intact, we may face sudden fall in values of indices

Due to some trigger as market is at the cross road of a change,

On which side is anybody’s guess

Traders and Investors should watch resistance and support

Levels while trading, keep stiff stop losses and book early

Profits.

Pivot for Nifty: 5863(19512)

R1 (First resistance) @ 5904(19636)

R2 (Second resistance) @ 5967 (19821)

R3 (Third resistance) @ 6008(19945)

Significance

R1 (5904) is proving to be stiff resistance for Nifty

Close above it will be a signal for the next move

Toward 5958, which is supposed to be a trend decider

In short term.

All long positions (if any) can be carried up to 6003

With a stop loss at 5880

 As long as Nifty trades above 5863(Pivot) traders are

 Advised not to go short in market.

S1 (First support) @ 5800(19327)

S2 (Second support) @ 5759(19203)

S3 (Third support) @ 5696(19018)

Significance

Since last two trading sessions Nifty is showing its

Inclination to drift down, in such circumstances

Support levels are more significant than resistance levels

Traders are advised to keep track of immediate support

Levels before creating positions on either side.

Nifty is moving in a range of 5800- 5944, say

S1 and R2, any close below S1 will open the

Possibility of markets drifting down to the all

Important support at S2 ( 5759).

S2 IS SUPPOSED TO BE THE TREND DECIDER

IN NEAR TERM PERIOD, fall below that will take

Market to much lower levels

VXI(Volatility Index)

Pivot at: 20.18

R1@21.32/R2@22.10/R3@23.14

Significance

All the above numbers indicate that there is increased

Volatility, As long as markets are news driven (not fundamentally)

Volatility will play big role. In such circumstances it is important

To trade with strict stop loss. As long as VXI is rising Nifty is

Under the threat of loosing its up ward momentum.

DMA (Day Moving average)

5 DMA @ 5884(19602)

10 DMA@ 5812(19362)

100 DMA @ 5713 (19051)

200 DMA @ 5713 (19032)

5 Day Exponential @ 5860(19514)

10 Day Expo. @ 5807 (19341)

100 Day Exp. @ 5658(18863)

Significance

Nifty is trading below 5 DMA @ 5884, for up move to

Continue Nifty must close above 5DMA.

10 Day exp. Will be an important support for Nifty

Once we close below that 100DMA will be the last

Support for markets, close below that will create

Panic in market leading to much lower levels, like

100 Day Exp. @ 5658 and 200Day exp. @ 5603.

COMMENTS

The 500/600 point rally during last few trading

Sessions was too fast and too steep,

Market is likely to take a breather for awhile, there will be

Some correction in large caps while mid caps may move.

This ‘Phase of Lull’ may break on either side; all depends

On ‘Crude Prices and Result season’

Technically short term looks to be capped at 5880/5950, any

Negative news will take Nifty to lower levels of 5770/5703.

There seems to be no ‘Positive trigger’ for the market to

Go higher, short term trend looks like to be down. It will

Be a good thing if markets pull back to some support and

Then carry the journey towards 6000 plus that to move

Without a stop, it will not be a healthy rise

Indian industrial number (IIP) and crude oil will be the

Main factors influencing the trade on Monday.

Next week there will be no trading for two days due to holidays,

Traders are not be advised to create and carry positions for next day.

All events will keep markets shallow and volatile

. It is better to be on side lines than to be in turmoil,

 Let the dust get settled, Let the trend get established,

Till that time ‘Keep off the screen’

And watch IPL 11

Long term traders are advised to exercise caution

In making fresh buying between the ranges 5800/5950.

Once Nifty is above 5950 or below 5800 fresh long

Term buying can be thought of, till that time keep

 Booking profits at all higher levels.

Stock specific

As far as possible,  all the trades should be ‘day trades’

Do not carry positions for next day

Book fast profits and keep a stop loss to protect losses

Abbon Offshore

RIL

Ranbaxy

Dr. Reddy

ICICI Bank

ITC

HUL

Federal Mugal @ 235(Stop loss @ 224, Tgt.260)

Graphite India @ 97 (Sl @ 92 , Tgt.110)

Celestial Lab @ 32(Sl @ 30, Tgt.36)

Federal Bank @ 423(Sl@ 403 Tgt.460)

Usha Martin Education @ 30 (Sl @ 28, Tgt. 38)

SCI @ 110 (Sl @ 102, Tgt. 126)

Sabero Organics @ 60(Sl @ 52, Tgt. 72)

Artson Eng. @54 (Sl @ 50, Tgt. 68)

Ador Weilding @ 178 (Sl @ 168, Tgt 188/192)

Sterlite Tecnology @ 64(Sl @ 58, Tgt. 72)

All the above mentioned stocks can be added

In a long term folio at every fall.

IMPRESSION (Personal Perspective)

TO MOVE AHEAD, MARKET NEED TO PULL BACK

Thanks

Dr. Vasant Bele

I have avoided giving weekly market review due to

The fact that there are number of events taking place

In coming week and there are only three trading days

During the week ahead.

All the views are personal, invest after consulting experts